Why Employee Benefits Are Essential

Forty years ago, most profit-sharing programs gave awards based on an individual worker’s productivity or based on organizational profits. However, today’s typical profit-sharing plan allows for 401(k) employee contributions and provides an employer match that is not calculated based on profits or productivity.

Before the Tax Reform Act of 1986, worker retention was favorably impacted through lengthy vesting schedules — most pension plans limited benefits to workers who completed 10 years of service.  Today’s broad-based benefits are usually provided without regard to a worker’s skill set, talent or performance.  And, despite consulting firm assertions, it is only a coincidence when today’s benefit plans correlate with worker productivity or an organization’s financial performance. In fact, broad-based benefit plans have not been proven effective at differentiating talent, because they must meet eligibility and non-discrimination requirements.

So why provide benefits?

Broad-based benefits, including 401ks, significantly improve the total rewards value each worker receives due to the combination of tax preferences, group dynamics and economies of scale – a value that is not available through any other means.  

SOURCE: Jack Towarnicky, Executive Director, Plan Sponsor Council of America 

For managers and human resources professionals, gathering employee insights and evaluating levels of engagement should be a priority to ensure future growth. A strategic survey program will serve as the basis of a strong people analytics practice, and when followed by meaningful action, the survey can become truly impactful and can spark change.

“At their core, surveys are about creating a conversation between employees and company leadership,” says Sarah Johnson, Ph.D., VP of Enterprise Surveys and Analytics for the management consulting firm Perceptyx. “What is the work experience like, what is going well and what can be improved?  Do employees understand where the company is headed, are they excited about the future and are they working together as effectively as possible?”

Some companies use a continuous listening strategy, encompassing annual census surveys, pulse surveys, onboarding and exit surveys and special topic surveys.

Finding the right approach

According to Johnson, effective survey questions drive action and positive change.

“The best questions reflect the topics that are most important to the company today, either because the answers provide insights into achieving the organization’s strategy, enhancing the way work gets done in organizations, or helping employees be successful.

 When well-designed, surveys create a deep and wide database ideal for HR People Analytics, which drive good, data-based decisions about people.”

Increasing productivity

“Employees have a lot to say, and the best companies make a point to listen and respond,” Johnson explains. “Employees are closest to customers, to how the work gets done and how the functioning of the company can be improved. Collecting that input and implementing changes based on those recommendations can only benefit the company.”

It’s also important to remember that conversations aren’t always positive.

“Surveys should address many elements of the work experience, including things that are going well, and things that are not going well, and managers and leaders must listen with an open mind. Honest feedback is essential to growth and improvement. When leaders acknowledge difficult messages and act upon them, trust and respect will grow in the organization.